Correlation Between NH Investment and Sungwoo Electronics
Can any of the company-specific risk be diversified away by investing in both NH Investment and Sungwoo Electronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NH Investment and Sungwoo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Investment Securities and Sungwoo Electronics Co, you can compare the effects of market volatilities on NH Investment and Sungwoo Electronics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NH Investment with a short position of Sungwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Sungwoo Electronics.
Diversification Opportunities for NH Investment and Sungwoo Electronics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005940 and Sungwoo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Sungwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Electronics and NH Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NH Investment Securities are associated (or correlated) with Sungwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Electronics has no effect on the direction of NH Investment i.e., NH Investment and Sungwoo Electronics go up and down completely randomly.
Pair Corralation between NH Investment and Sungwoo Electronics
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.67 times more return on investment than Sungwoo Electronics. However, NH Investment Securities is 1.5 times less risky than Sungwoo Electronics. It trades about -0.06 of its potential returns per unit of risk. Sungwoo Electronics Co is currently generating about -0.09 per unit of risk. If you would invest 1,362,000 in NH Investment Securities on August 28, 2024 and sell it today you would lose (24,000) from holding NH Investment Securities or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. Sungwoo Electronics Co
Performance |
| Timeline |
| NH Investment Securities |
| Sungwoo Electronics |
NH Investment and Sungwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Sungwoo Electronics
The main advantage of trading using opposite NH Investment and Sungwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Sungwoo Electronics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sungwoo Electronics will offset losses from the drop in Sungwoo Electronics' long position.| NH Investment vs. AptaBio Therapeutics | NH Investment vs. Daewoo SBI SPAC | NH Investment vs. Dream Security co | NH Investment vs. Microfriend |
| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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